PG&E estimates tens of thousands of bills / Practice could result in overcharging users

David Lazarus

Published 4:00 am, Wednesday, September 8, 2004

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PG&E sends out 70,000 estimated bills like this one each month.

PG&E sends out 70,000 estimated bills like this one each month.

PG&E estimates tens of thousands of bills / Practice could result in overcharging users

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PG&E says it sends out almost 70,000 estimated bills each month -- frequently for amounts higher than actual usage would warrant -- because customers' meters are inaccessible.

But current and former insiders say the utility deliberately bypasses some neighborhoods to save itself the expense of hiring enough people to handle the workload.

State regulators worry that ratepayers are being overcharged on a routine basis. They said an investigation into PG&E's billing practices already is under way and that the utility could face significant fines or penalties.

PG&E spokesman Ron Low said that while meters in a particular neighborhood may go unread due to employee illness or traffic conditions, no policy exists to estimate customers' bills as a cost-cutting measure.

"Our policy is to read every customer's meter each month," he said. "We have the proper staffing level to allow us to do so."

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But past and present insiders say PG&E lacks a sufficient number of meter readers to inspect about 9 million meters in each monthly billing cycle.

Gaston Marcillac, who retired from Pacific Gas and Electric Co. in May after 40 years as a programmer in the utility's billing department, said dozens or even hundreds of households in a particular neighborhood may be skipped in any given month.

"The powers-that-be at the company decided about five years ago they could save money by not sending people out on every route," he said. "They're not reading meters that they could be reading, and this is something the company should be held accountable for."

Bill Brill, who worked as a PG&E meter reader for 23 years before retiring in 1999, also said the utility routinely estimates customers' bills because it does not have enough people to examine every meter.

"That's absolutely the case," he said. "It's been happening regularly for a number of years."

One senior meter reader in the Bay Area, who asked that her name be withheld for fear of retribution, said "forced completes," as bill estimates are known at PG&E, were common in most local cities as recently as a few months ago.

She said the practice is abating in some cities as the utility pushes meter readers to put in extra hours. "We're short so bad," she said, "we've worked every Saturday for months."

State regulators said an investigation into PG&E's billing practices, including estimated bills, began about two months ago after an unusual increase in complaints from customers.

Utilities nationwide are given leeway to estimate bills if they can't get at customers' meters. Some utilities are permitted to issue an estimated bill every other month or have customers phone in with usage details.

"We take that to mean that they're supposed to be read at least once a month, unless for some reason the meter reader is prevented from having access to the meter," said Terrie Prosper, a spokeswoman for the California Public Utilities Commission.

Carl Wood, a PUC member, said PG&E faces fines or other penalties if the utility is found to be shirking its meter-reading obligation.

"If PG&E is pocketing money from rates that are intended to pay for adequate service, that's a serious problem," he said. "At the very least, adequate service means reading people's meters."

PG&E's Low said that about 68,000 estimates were included among 5.5 million bills mailed out in July.

He said most estimated bills were the result of meters' being inaccessible to PG&E personnel -- for example, if a meter is in a closed garage or there's a dog in the yard.

"There are occasions when we have to estimate a bill because a meter reader can't make it to a house or business," he said. "But almost all those situations are due to certain circumstances."

State officials say a key problem with PG&E's use of estimated bills is that a tiered rate system was introduced during the energy crisis to promote conservation. Lower rates are charged if a customer uses less power.

When PG&E issues an estimated bill, the utility says it corrects for any discrepancies with actual usage in subsequent billing cycles. However, usage for the estimated period will be averaged in with later usage.

"What this means," said Jeff Brown, a PUC member, "is that you might use very little electricity one month because you went on vacation but more when you return. If the first month was estimated by PG&E, you might end up paying a higher rate if it's averaged with the other month."

He said it would be "a serious violation" of state regulations if PG&E is deliberately estimating whole or partial routes to cut costs.

Nearly 70,000 estimates per month represent only 1.2 percent of PG&E's customer base. But on an annual basis, this can translate into millions of dollars in additional revenue if electricity is being billed at higher rates.

Berkeley resident Fred Lisker, to cite just one example, received an estimated bill recently that was about $60 over what he should have been charged. He received a refund after he called PG&E to complain.

Marcillac, the former programmer, said that even with day-to-day difficulties such as dogs in yards, the number of estimated bills seems too high.

"There can't be 68,000 homes where you can't get access to the meter," he said. "There's no way PG&E would let the problem get so big. We would be regularly taking steps to improve access."

PG&E emerged from three years of bankruptcy in April. Several months before that, it handed out more than $83 million in bonus money to 17 senior execs.

"They never used to have this problem when they were fully staffed," said Brill. "Now it's much more common."

PG&E customers with questions about their bills can contact the PUC at (800) 649-7570 or fill out an online complaint form at www.cpuc.ca.gov.

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